The frauds in auditing can be of three types.
these are as follows:-
1. Misappropriation of cash:- It is very easy to do as usually done by theft of cash receipts, cheques, showong fictitious payments to workers, creditors ,putchases etc.
In small entities, the number of opportunities and methods of committing fruits is very less but increase the size of business increases the opportunities.
2.Mis appropriation of goods:- This type of misappropriation is difficult to detect unless proper stock records are maintained.
It is easy to miss appropriate goods which are less bulky and of high value
This type of fraud can be done means the goods may be removed by a member of the stuff so his personal benefit all the sales return maybe misappropriated before such goods are received by the store keeper.
3.Manipulation of accounts:- The accounts of a business can be manipulated by making false entries regarding fictitious purchases or fictitious sales are fictitious expenses etc.
whenever such fraud is committed it usually involves large amount and is done intentionally this is usually committed by owners or manager or directors or board of directors